Yes, it's an informal logical fallacy. There's nothing inherently better about a middle ground - in some cases it might be worse than the two extremes that it meets between.
Does that really make it a logical fallacy though? Especially since it seems context-bound. I imagine there could be contexts where the middle ground is better by virtue of being middle ground (such as when reaching a compromise, for instance).
It is true that being the middle ground is typically not a good argument for a position, I guess, but is it on the level of logical fallacy? If someone does think that it is a good argument is he more illogical than someone who has some other stupid argument for a position?Yes it is a logical fallacy, but as I said it's an informal one. The distinction is that it's fallacious for reasons other than the form or technical structure of the argument. The reasoning behind a formal fallacy is always wrong - the logical structure of the argument renders it invalid. An informal fallacy on the other hand can have a valid logical structure, but may be based on false premises or a bad justification structure.
In the case of the middle ground fallacy it has the premise that the middle ground between two or more positions is always better than the two positions. The logic is sound if the premise it is based on is correct. Since it can be shown that there are cases where the middle ground isn't better than one or more of the positions the premise is false, thus making it an informal logical fallacy.